The Digital Dollar Foundation
The future of the Dollar
Around the world, cash liquidity crunches continue to affect a globalized digital economy in transition throughout a prolonged pandemic response. There are theoretical limits to physical currency mediums being used for value exchange in this environment as traditional economies test the limits of archaic transaction methods.
Seemingly, now more than ever, economic thought leaders around the world are starting to ponder the utility of a cashless society – or at least a less-cash-based one. Regardless of past lessons around reserve notes issued by central banks, current conditions in global markets will require some dynamic and diligent planning if a quick recovery is even monetarily possible once stimulus is restricted to cash dominated systems.
The question around the world right now is: “How can cash move faster?”
As of the writing of this post, the Treasury has announced that future household stimulus will utilized prepaid debit cards to more effectively move minted money. But, there are costs associated with such methods that may restrict the means in which this cash can be utilized – high fees for dealing with cash-only businesses who may not even access debit/credit on their premises.
The United States Dollar hegemony has also had its future called into question in recent months. The CCP through the People's Bank of China have moved towards a central bank digital currency that dodges exchange rates to USD dominated commercial markets internationally. However, even with the pandemic limiting cash liquidity abroad, the United States still lags behind in the arms race towards legal definition of digital assets and their regulatory frameworks domestically.
Introduction to the Digital Dollar
The Digital Dollar Project is a partnership between technology firm Accenture (NYSE: ACN) and the Digital Dollar Foundation (DDF) to advance exploration of a United States Central Bank Digital Currency (CBDC). The purpose of the DDF Project is to encourage academic and commercial research supported by public discussion on the perceived advantages of a digital dollar offering backed by the US Federal Reserve.
The groups plans to convene with private sector thought leaders and actors to propose possible models to support the public sector's utilization of a digital dollar offering. The Project will develop a framework for practical steps that can be taken to establish a dollar CBDC with full protections from the FED and full confidence of the US consumer.
As an example, the ability to directly exchange a CBDC for a tokenized security will have profound effects on global capital markets.
Taking a step back, the idea of a digital dollar is not new or novel. This concept is simply a domestic reiteration of the infamous Tether $USDT stable coin pegged to the value of BTC relative to the $USD. Various international exchanges have also gone so far as to issue a representative dollar denominated stable coins that attempt to reduce exchange spot trading risks due to volatility. The relative stability of a USD stable coin helps to help lower costs for users who operate across international jurisdictions as well.
Interfacing with the monetary inter-workings of the United States Dollar is no simple task. The red tape of regulatory familiarity is drawn thick, and not enough reward exists for firms to challenge the financial definitions around digital assets in state and federal courts.
Digital Dollar Stakeholders
Who are the leaders at the forefront of the fight towards a bolstered USD in the form of a Digital Dollar? Indeed, some big names (most of this is taken directly from their website):
J. Christopher Giancarlo is Senior Counsel to the law firm Willkie Farr & Gallagher and the former Chairman of the U.S. Commodity Futures Trading Commission (CFTC). Mr. Giancarlo also served as a member of the Financial Stability Oversight Committee (FSOC), the President’s Working Group on Financial Markets, and the Executive Board of the International Organization of Securities Commissions (IOSCO). Mr. Giancarlo serves on the Advisory Board of the Chamber of Digital Commerce and as an independent director of the American Financial Exchange. He is also Chairman of the Board of Common Securitization Solutions, Inc.
Former chairman Giancarlo had this to say about a Digital Dollar,
A digital dollar would help future-proof the greenback and allow individuals and global enterprises to make payments in dollars irrespective of space and time.
Charles (“Charlie”) H. Giancarlo is an entrepreneur, investor, and executive. He is currently the Chief Executive Officer of Pure Storage (NYSE: PSTG). He formerly served in senior executive roles at Cisco Systems (Nasdaq: CSCO) and Silver Lake Partners, the private equity firm. Daniel Gorfine is Founder and CEO of Gattaca Horizons LLC and Adjunct Professor of Law at the Georgetown University Law Center teaching FinTech Law & Policy. He previously served as the CFTC’s first Chief Innovation Officer and Director of LabCFTC.
Dave Treat is a Senior Managing Director, co-Lead of Accenture’s Blockchain Business and Accenture Lead of the NY Fintech Innovation Lab. He serves on the Board of Directors for the Linux Hyperledger Project, Enterprise Ethereum Alliance, Global Blockchain Business Council and the ID2020 Alliance, is a member of the World Economic Forum C4IR Global Blockchain Council and is a program advisor for the Chamber of Digital Commerce.
Both the Giancarlo's are standouts in the finance space for obvious reasons, they comprise the perfect mixture of public/private financial exposure. But Dave Treat brings some serious experience to the digital assets spaces. Accenture has been at the forefront of the CBCD research projects undertaken by leading firms around the world. This balance of public/private and foreign/domestic experience around currencies makes the Digital Dollar Foundation a force to be reckoned with.
Will we see major pushes towards regulatory clarity with the Digital Dollar Foundation leading the charge in the conversation? Only time will tell. In the meantime, the below interview with ex CFTC chair Giancarlo is worth the watch: